Steel and Tube cleared to acquire Fletcher Steel
BA decision Steel and Tube/Fletcher Steel
Issued 27 April 2001/41
Commission clears Steel and Tube to acquire Fletcher Steel
The Commerce Commission today cleared Steel and Tube Holdings Limited to acquire Fletcher Steel Limited.
Last month the Commission had cleared the reverse of this proposal-an application from Fletcher Steel to acquire Steel and Tube.
Commission Chair John Belgrave said that the Commission was satisfied that if Steel and Tube's proposal went ahead, then no party would acquire or strengthen dominance in any market.
In its earlier decision, the Commission had concluded that there were six relevant markets and that dominance would not be acquired or strengthened in any of them. In the decision made today, the Commission stated that in addition to those six, two further markets were relevant to Steel and Tube's application.
Mr Belgrave said that the additional markets were included in the investigation because, while Steel and Tube itself does not operate in them, Steel and Tube's Australian parent company, OneSteel, does or could.
The two additional markets are national markets for production and importation of merchant steel products and reinforcing steel.
OneSteel is a significant player in the merchant steel production/importation market, and is a potential competitor to Pacific Steel, which is a business owned by Fletcher Steel, in the reinforcing steel production/importation market. However, given the availability of imports from other firms in Australia and Asia, the proposed acquisition is not considered to have the effect of creating or strengthening dominance in either market.
In relation to the six markets considered in the previous application, the Commission concluded that reversing the proposal with Steel and Tube as the acquirer would make no material difference.
"The Commission's overall conclusion is that no party would acquire or strengthen dominance in any of the eight relevant markets," Mr Belgrave said.
The markets relevant to both applications were national markets for:
* distribution of merchant steel products
* distribution and fabrication of reinforcing steel
* distribution and processing of steel plate products
* distribution and processing of steel coil products
* manufacture and distribution of domestic roofing products, and
* manufacture and distribution of industrial roofing products.
The additional markets relevant to Steel and Tube's application were national markets for production and importation of:
* merchant steel products, and
* reinforcing steel.
Public copies of the decision made by the Commission today (Decision 427) will be available early next week. Public copies of the Commission's previous decision (Decision 421) are available on its website, www.comcom.govt.nz, and in hard copy from reception at its Wellington office level 7 Landcorp House, 101 Lambton Quay.